Trade and the world order

A container ship being loaded at a port — Points of viewA small trading nation at the end of the world depends on open markets and reliable friends. It can no longer take either for granted.

New Zealand sends 99 percent of its trade by volume across the ocean, and its prosperity rests on rules that bigger countries choose to follow. I have spent the past decade arguing that New Zealand should defend those rules, pay for its own security and stay open to the world.

Core beliefs

Trade is not a contest to be balanced

Countries run trade deficits and surpluses with each other for many reasons. A deficit with one country says nothing about whether trade is fair. Tariffs designed to balance every bilateral relationship make everyone poorer, starting with the country that imposes them.

Read: A world trade policy for grown-ups (Insights, 2025)

Small countries need rules

New Zealand built its prosperity on a simple principle, that big countries cannot simply invade small ones and that deals once struck will be honoured. When the United States treats alliances as short-term arrangements, New Zealand has nothing to fall back on but hope.

Read: The US ditching the rules-based order leaves NZ living on a prayer (Newsroom, 2025)

Australia and New Zealand must defend themselves together

In 2025, three Chinese warships held live-fire exercises 700 kilometres off Sydney. With America in retreat, Australia and New Zealand will either secure their neighbourhood together or watch it unravel separately. I have called for a new ANZAC, a closer military, economic and political partnership.

Read: The US is in retreat as China rises: it’s time for ANZAC 2025 (The Australian, 2025) and Time for ANZAC 2.0 (Insights, 2025)

Investors need to trust the rules will last

Investors can live with a new tax or a tougher regulation because they can factor it in. A government prepared to reach back into what people already own is a different matter, because nobody can put a price on that.

During the 2026 election campaign, parties proposed breaking up supermarket co-operatives, restructuring power companies and cancelling permits already granted. A country’s reputation for the rule of law can suffer from such signals before any law changes.

Read: Is NZ now saying ‘no’ to foreign investment? (The Australian, 2026)

Do not confuse economic and strategic interests

Germany learned in 2022 what it costs to depend on an authoritarian power. New Zealand’s dependence on China is built on farm exports rather than energy imports, but the parallel is clear. Like Germany, New Zealand has put its economic interests ahead of its security.

Read: The foreign policy lessons NZ should learn from Germany (The Australian, 2022)

How I came to this

I grew up in West Germany during the Cold War, when the Western alliance kept the peace and open markets made us rich. My doctorate was on competition law, and I have believed in open markets ever since.

For most of my career, the global order looked secure enough to take for granted. Since 2016, its assumptions have crumbled one by one. Russia invaded Ukraine, China built up its navy, and the United States turned against the trading system it had created.

That has forced me to think harder about how a small, distant country stays safe and prosperous in a world that has lost its policeman.

2018Our submission on the Overseas Investment Amendment Bill urges Parliament not to proceed without a proper assessment.
2022Russia invades Ukraine. I urge New Zealand to learn from Germany’s foreign policy mistakes.
2024Belt and Road Initiative: Implications for New Zealand, with Nick Clark.
2025America imposes sweeping tariffs. I call for ANZAC 2.0.
2026My foreword to Adrift makes the case for sea power. The Initiative publishes an open letter from 51 business leaders defending property rights.

What happened next

In 2025, the Government committed to lifting defence spending to two percent of GDP within eight years, a level not sustained since the early 1990s. Cabinet must decide by 2027 whether and how to replace the frigates Te Kaha and Te Mana.

The same government appointed New Zealand’s first minister for foreign direct investment and set up Invest New Zealand to tell the world the country was saying yes to investment. The 2026 election campaign sent a different message.

Reports

Submission on the Overseas Investment Amendment Bill2018 Belt and Road Initiative2024

Leonardo’s Legacy2025

In my own words

“Trying to equalise every trade relationship through tariffs is like trying to make every household earn exactly what it spends at each shop.”
A world trade policy for grown-ups, Insights, 11 April 2025

“With America in global retreat, the world has lost its policeman.”
The US is in retreat as China rises, The Australian, 20 March 2025

“A country’s reputation for the rule of law does not depend solely on current law itself.”
Is NZ now saying ‘no’ to foreign investment?, The Australian, 28 September 2026